Answer:
According to the accrual basis, the revenue must be recorded once it has been accrued or earned. The amount received would be recorded as unearned fees, the initial entry would be:
Dr Cash $59,500
Cr Unearned Fees $59,500
When the earnings are earned which means that the consideration from our part has been delivered, now the entry would be recorded as:
Dr Unearned Fees $59,500
Cr Revenue (Earned Fees) $59,500
And if the cash accounting basis is used then the amount would be recorded as revenue (Earned fees) on the receipt of the amount. So the entry would be:
Dr Cash $59,500
Cr Revenue $59,500
Answer:
a) Unbilled Revenues Debit $ 59,500
Service Revenues Credit $ 59,500
b) in case the entity was working on a cash basis then no entry would have been required
Explanation:
The accounting entry to record unbilled revenues is to debit the Unbilled Revenues and to credit the Service Revenues account. The revenues is credited because it has been earned and the debit goes to unbilled revenue since it is unbilled.
When the amount in billed, the Unbilled revenues shall be credited and accounts receivables debited.
In an entity using cash basis of accounting, no accruals are recorded and only when the cash is received is the revenue account credited.
